The coalition’s emergency Budget on Tuesday is expected to include a freeze in council tax in England next year.
Political commentators across the media say the move is intended to soften the impact of harsh spending cuts and tax rises.
The Tory manifesto promised a two-year freeze, and the coalition agreement between the Conservatives and Liberal Democrats said it would be frozen “for at least one year” with aspirations to extend this into a second year.
Chancellor George Osborne told the BBC at the weekend that Britain was “on the road to ruin” unless the record deficit is cut.
He said the coalition had inherited “a truly awful financial situation” and he would set out a four-year plan to deal with it.
Mr Osborne has already announced that the former Labour minister John Hutton will head a commission into public sector pensions.
He claimed that Mr Hutton’s involvement would mean the commission into future pensions would be independent and have cross-party input.